China’s Poly offers major stakes in Sydney and Melbourne office projects
Chinese property development group Poly Global is looking to step up its Australian operations by offering stakes in about $1 billion of office projects it has under way in Sydney and Melbourne.
The group has tapped real estate agency Knight Frank to seek out partners on interests in each of the projects, which are close to winning precommitments to get under way, with Poly to develop and co-own the towers.
Poly is pitching the move as a strategic play to expand its global asset management business which has a focus on value-add opportunities and developments, and says it is acting after receiving approaches on the projects.
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The group has appointed Knight Frank’s John Bowie Wilson to formally market stakes in the properties to local and offshore investors, with Poly looking to sell 49% interests via managed investment trusts.
Poly is keen to remain majority invested in the projects and deliver them but is hoping the move will enable it to ramp up its broader development pipeline that also includes residential projects.
The $500 million office tower near Circular Quay is advancing with contracts being finalised with a builder after listed construction group Watpac undertook early contracting works.
The 17,000sqm office project is Poly’s first in local office site and is timed to capitalise on the tight leasing market. Dubbed the Poly Centre Sydney, it will sit at 210-220 George St and architecture firm Grimshaw won a design award for its work.
The tower is a boutique alternative to the upcoming AMP Capital developed Quay Quarter Tower and Lendlease Circular Quay Tower, both of which are filling up.
In Melbourne, the Chinese-backed developer is hunting for an anchor tenant for its 24-storey office tower at 1000 La Trobe St, Docklands, which will span about 31,500sqm.
The site had previously been considered for a residential project that could have housed 600 apartments after Poly bought the land for $32 million from the Liberman family-backed Digital Harbour (Holdings).
Poly’s move may see it eventually sell off a stake in its Richmond property in Melbourne, that is also slated for an office development, but that is likely to be handled by the agency in future.
The offer could see either a local investor pick up a slice of the office towers or Poly draw an overseas heavyweight to back them.
Either scenario could see it kickstart the projects earlier than anticipated with the group willing to use its outsized balance sheet to get projects started ahead of an expected wave of developments in the two cities.
The forward funding or takeout market is a major growth sector this year with some early deals being struck on towers under way in North Sydney and Pyrmont.
Abacus Property Group and partner South Korean Pension Fund NPS are targeting the purchase of Zurich’s new North Sydney headquarters for more than $300m, and in Sydney’s Pyrmont ARA Asset Management is circling the new home of French PR company Publicis Groupe for about $300 million.
This article originally appeared on www.theaustralian.com.au/property.
